Interest Rate Spreads in English-Speaking African Countries

IMF Working Papers, April 1, 2007

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Interest Rate Spreads in English-Speaking African Countries

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Bibliographic details

• Authors: Joe Crowley
• Published: April 1, 2007
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451866650.001

Summary findings

• The paper examines interest rate spreads in English-speaking African countries.
• Higher spreads were found to be associated with lower inflation, a greater number of banks, and greater public ownership of banks.
• Higher deposit interest rates were found to be associated with lower interest rate spreads, but higher net interest margins.
• A large increase in spreads in the late 1980s and 1990s may be explained by a strengthening of financial sector supervision.
• Limited data suggested that poor governance, weak regulatory frameworks and property rights, and higher required reserve ratios are associated with higher spreads.

Empirical associations and metrics reported

• Associations reported (qualitative as stated):
  • Higher spreads ↔ lower inflation.
  • Higher spreads ↔ greater number of banks.
  • Higher spreads ↔ greater public ownership of banks.
  • Higher deposit interest rates ↔ lower interest rate spreads.
  • Higher deposit interest rates ↔ higher net interest margins.
  • Increase in spreads in the late 1980s and 1990s ↔ strengthening of financial sector supervision.
  • Limited-data associations: poor governance, weak regulatory frameworks and property rights, and higher required reserve ratios ↔ higher spreads.

Publication and metadata

• Author: Joe Crowley
• Publication date: April 1, 2007
• Series: Working Paper No. 2007/101
• Issue: 101
• Volume: 2007
• Pages: 34
• DOI: https://doi.org/10.5089/9781451866650.001
• Stock No: WPIEA2007101
• ISBN: 9781451866650
• ISSN: 1018-5941
• Subject: Banking, Commercial banks, Deposit rates, Inflation, Personal income
• Keywords: adjusted interest rate, deposit rate, interest income, interest rate spread, lending rate, WP

IMF Working Papers. "Interest Rate Spreads in English-Speaking African Countries" by Joe Crowley, April 1, 2007.

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